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TMI Blog2023 (4) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... he light of the terms of distribution agreement and held that the assessee is a distributor and not a service provider and also that RPM is the MAM. Since there is nothing contrary on record, we find it difficult to take a different view for this year under consideration. We, therefore, accordingly set aside the impugned findings of the authorities below on this aspect and restore the issue to the file of AO/ TPO to consider the RPM as the MAM and take a view on the necessity of any adjustment towards ALP for distribution function, after hearing the assessee. Appeal of the assessee is treated as allowed for statistical purposes. - ITA-TP No. 282/Hyd/2022 - - - Dated:- 18-4-2023 - SHRI RAMA KANTA PANDA, ACCOUNTANT MEMBER AND SHRI K. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 06/11/2015, the learned DRP did not accept the objections filed by the assessee. Accordingly, a final assessment order was passed on 21/12/2015 by assessing the income of assessee 27,61,122/- after making the addition of Rs. 1,54,47,842/- towards TP adjustment. Assessee filed an appeal before the Tribunal and a Co-ordinate Bench of this Tribunal set aside the issue to the file of the learned Assessing Officer/learned TPO directing them to conduct a fresh TP analysis by treating the impugned transaction of the assessee as distribution and to determine the most appropriate method. 4. Subsequently, pursuant to the orders of the Tribunal, the learned TPO issued notice to the assessee and by order dated 30/10/2019, considered Transactional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d resold to a third party by reducing the resale price by an appropriate gross margin thereon. Such margin would be the amount which the reseller would like to cover the cost of sales and other charges and such adjusted margin should be compared to a comparable un-controlled resale transaction. Sum and substance of the argument on behalf of the Revenue is that when there is no purchase, there cannot be any resale and for that simple reason, RPM is not an appropriate method. According to the learned DR, under the agreement, the assessee is receiving the goods for free of cost, incurring certain expenditure and distributing the goods for a particular price and all this constitutes a service under the agreement and there is no profit element o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /Hyd/2017, for the assessment year 2013-14 in assessee s own case, is furnished before us and the same part of the record. The subject matter under ground No. 10 thereon, the assessee challenged the findings of the learned DRP stating that the learned DRP committed error in not appreciating the fact that the transfer pricing regulations cannot be applied to the distribution activity or service provided when no payment was made to the AE towards software licenses and also in rejecting the RPM as the most appropriate method and selecting TNMM in its place for determination of ALP for distribution activity. 10. On a perusal of the order dated 26/11/2020 in ITA No. 2280/Hyd/2017, for the assessment year 2013-14 in assessee s own case (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el is no longer res integra in view of the decision of the Hon ble Bombay High Court in the case of CIT vs. Phoenix Mecano (India) Pvt. Ltd., reported in 414 ITR 704 and in the case of CIT vs. Thyssen Krupp Industries Pvt. Ltd., reported in 381 ITR 413 (Bom) and CIT vs. Tara Jewels Export P. Ltd., reported in 381 ITR 404 (Bom). 6.7. In any case we find that the issue in dispute is squarely covered by the Co-ordinate Bench of this Tribunal in assessee own case for the A.Y. 2011-12 in ITA No. 343/Hyd/2016 dated 11/04/2018 wherein this Tribunal after examining the nature and terms of the distribution agreement had held that assessee s functional profile is akin to a distributor and not a service provider. The relevant observations are made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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